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The economic issues of a Clean future in energy

The economic issues of a Clean future in energy

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Virginia’s fourth branch of government is in the process of making decisions that will affect not only your electric bill but also potentially what types of jobs are in Southwest Virginia.

That fourth branch of government is the nickname often applied to the State Corporation Commission, the panel that regulates utilities. For a long time, perhaps even since the agency’s founding in 1902, the SCC was considered a friendly venue for those utilities. Now the Democratic majority in the General Assembly has installed two new judges on the three-judge panel, so we’ll see what this remade SCC has in store.

We may get our first glimpse when the SCC decides how to regulate utilities under the Clean Economy Act, the landmark legislation the General Assembly passed last year to decarbonize the state’s electric grid. The eyes can play tricks. Many see that bill name and think Clean Energy Act. It’s that, too, but the substitution of “economy” for “energy” was intentional — a way for proponents to make the case that green energy doesn’t hurt the economy, it helps the economy. Broadly speaking, that’s true. Renewable energy jobs are one of the fastest-growing parts of the economy; from 2014 to 2019 the solar-energy sector alone added 156,000 jobs in the U.S. — a growth rate of 167%. However, the catch is those new jobs being created are necessarily where the old ones in fossil fuels are being phased out. That’s where the Green New Dealers often don’t have a very good response, but one that we in Virginia should be more concerned about. We only have a few counties that produce coal, but they’re still our counties — and the economic tentacles of coal, even in its reduced form, still reach far beyond the coalfields. There are lots of businesses in Roanoke that make a living selling equipment to coal companies.

That’s where the interpretation of the Clean Economy Act becomes critical. The act includes this notable language directed to the SCC: “The Commission shall ensure that the development of new, or expansion of existing, energy resources or facilities does not have a disproportionate adverse impact on historically economically disadvantaged communities.”

So what, exactly, does it mean? Or, more to the point, what will our refashioned SCC think it means?

On the one hand, the act specifically directs Dominion Energy to go carbon-free by 2045 and Appalachian Power Co. to go carbon-free by 2050. That means shutting down coal plants, which invariably means a hit to coal country somewhere. The coal that Dominion and Appalachian burn doesn’t necessarily come from Virginia, though. Indeed, Appalachian no longer has any coal-fired plants in Virginia, at all. That means you can’t draw a straight line from Appalachian’s mandate to go carbon-free to the economic troubles in Southwest Virginia. It’s easier to draw a straight line from Dominion, because one of its coal-fired plants is the Virginia Center Hybrid Center Energy in Wise County.

The act’s language about “economically disadvantaged communities” isn’t necessarily written with the coal counties in mind. Elsewhere in the act, those communities are defined as “(i) a community in which a majority of the population are people of color or (ii) a low-income geographic area.” The latter would cover the coalfields; the former would not. The language seems aimed at making sure a utility doesn’t plop down a solar farm in the middle of some poor Black community the way Dominion Energy stirred up a fuss when its proposed (and now canceled) Atlantic Coast Pipeline was mapped to go through the Union Hill community in Buckingham County.

Still, that language is there, and it’s language that conceivably could be used to help coal counties transition to a new economy — if the new SCC wants to read it that way.

Here’s how it could: It could require that some of the solar farms or wind farms that Dominion and Appalachian will be investing in be in the coalfields. That may not be where economics dictate they should go, but you can make the argument that if you’re replacing coal in Southwest Virginia with renewables elsewhere in Virginia (or even out of state) then that has a “disproportionate adverse impact on historically economically disadvantaged communities.” That may not necessarily be what the Clean Economy Act had in mind, but you can make the case that it applies nonetheless.

In effect, a more muscular SCC could do what both politicians and the free market have failed to do — tie the retirement of coal to specific renewable energy investments in coal country. Democrats should support this because that would help underscore the “economy” part of the Clean Economy Act. Republicans should support this because they represent all those coal counties. They also have been among the most vocal in highlighting a legitimate concern as solar farms proliferate — how much farmland or timberland do we want to take out of production? They don’t seem concerned when that land gets paved over for a new big box store, but it’s still a legitimate question. (More rooftop solar would help alleviate this problem, but we digress). The coal counties, though, have lots of “brownfields” and former mine sites that could be used for solar farms or wind farms without taking farmland out of production. Del. Terry Kilgore, R-Scott, sponsored a bill this past session — now signed into law — creating a mechanism to provide grants for renewable energy projects on such land.

Here’s something that might surprise you: One environmental group tells us that Kilgore, a stalwart conservative from coal country, has become one of the leading advocates for bringing renewable energy to Southwest Virginia because he’s come to see the job potential that it has. Speaking of which, here’s another reason the coal counties, in particular, should be pushing for more solar energy: Two-thirds of solar energy jobs are in installation and the average salary for those installers is $42,341 — which is higher than the median household income in every county in the coalfields.

The dirty little secret of the Clean Economy Act is that the transition to renewables will drive up electric bills for a while, as utilities invest in new facilities — even if renewable energy itself is cheaper than fossil fuels. If our bills are going to go up, the SCC ought to do what it can to make sure there’s an economic trade-off — more jobs in a part of the state that’s otherwise losing jobs in this energy transition. That would be the New Deal part of a Green New Deal.

—The Roanoke Times

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